P H I L A N T H RO P I C T R E N D S Q U A RT E R LY
2009: Issue 1
trends
The definitive
The definitive
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per year
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“You never want a serious crisis to go to waste.
And what I mean by that is it’s an opportunity to
do things that you think you could not do before.”
uoting recent comments made by Rahm
Emanuel, President Obama’s Chief of Staff,
this concept summarizes our March 2009 edition
of Philanthropic Trends Quarterly.
Q
PHILANTHROPIE
EN PERSPECTIVE,
BULLETIN TRIMESTRIEL
The recent global economic uncertainty
has
2009: Bullet
resulted in unprecedented challenges for all
sectors, including the not-for-profit sector. The
silver lining, however, may lie in the opportunities that frequently accompany times of crisis.
Often, crises are catalysts for review, reflection
and assessment that commonly lead to positive
change and innovation. They force us to reevaluate priorities, question assumptions and deconstruct processes. And, those who seize the
opportunity and do it well generally emerge
stronger and wiser as a result.
En perspective
Le bulletin d’analyse [4] trimestriel par excellence des tendances philanthropiques au Canad
Much information has been shared over the
last several months about how to best respond
to the current economic situation, including
some sound advice: remain focused and avoid
distraction; communicate often with external
stakeholders such as donors and prospects;
stay on mission and don’t lose sight of who
you are and the value you provide; and finally,
don’t forsake the long term for the short term.
This guidance provides an excellent roadmap
for navigating activities with external stakeholders. But what about inside the organization? What are the opportunities? How do we
capitalize on them? And perhaps, most importantly, how do we stay afloat in order to be able
to see the positive effects of these changes? In
this edition of Philanthropic Trends Quarterly,
we focus the lens internally and explore how
organizations are and could be responding
from the perspective of their operations.
We identify a number of the characteristics that
organizations should be cultivating in order to
remain healthy and viable. We explore the concept of mind-shifting, which involves redefining
some of the paradigms under which we work.
We learn about the diversification and retooling
activities that a number of leading organizations
are undertaking. And finally, we gain insight
into how to make good decisions under conditions of great uncertainty.
As always, our thoughts are based not only
on our own experience here at KCI, but also on
the insights of the members of our National
Advisory Board. Their input is invaluable and
we extend a special thank you to them all.
For a list of our Advisory Board, please visit
www.kciphilanthropy.com/advisoryboard
We also had the opportunity to interview two
specialists in the field of organizational behaviour; Dr. Glen Whyte, CCMF Chair in Integrative
Thinking, Rotman School of Management,
University of Toronto and Dr. Jerry Gray, Dean
Emeritus, I. H. Asper School of Business at the
University of Manitoba. Their insights were most
valuable and we are pleased to be able to share
their thoughts with you.
Finally, I am delighted to present the first
edition of our new format, which we are calling
Philanthropic Trends Quarterly. By publishing
four times a year, we will be able to share
thoughts on issues as they emerge and are
relevant to you. And, in an effort to be more
environmentally friendly, we will now be distributing electronically. We hope you enjoy!
Marnie Spears
President and CEO
Rx for Survival
Notwithstanding the very real need for organizational agility, Gary Durbeniuk, Vice-President
(Development) at the University of Calgary provides an important cautionary note.“Regardless
of the circumstances in which we find ourselves,
we have a set of core values that guide our interactions with donors and prospects. So no matter how we adapt strategically or operationally
from an internal perspective, nothing changes
about how we build and maintain our relationships with friends and stakeholders.”
We’re in this together…
United we stand, divided we fall.
trong leadership, energy, fortitude, commitment, composure and even a sense of
humour! These were some of the characteristics
that our Advisory Board members cited when we
asked them what organizations need in order to
remain resilient during tough economic times.
S
While all these characteristics are valid and
important, an additional two stood out for our
Advisory Board as being particularly critical at
times like these - agility and integration. In addition, they told us about the need to diversify,
retool and look at planning differently.
Float like a butterfly…
Muhammad Ali was considered by many to be
the greatest boxer of all time. He possessed
numerous qualities that contributed to his phenomenal success, but one of the most important
was his agility. His speed and quickness not only
enabled him to respond to whatever his opponents threw at him, it also allowed him to capitalize on opportunities as they became apparent.
In an organizational context, we happily don’t
have to dodge punches. But, being able to adapt
quickly goes a long way to facilitating success in
both good times and bad.
The ability to respond rapidly and cost efficiently
to both challenges and opportunities is the hallmark of organizational agility, and a truly agile
organization is one that can make the necessary
adaptations at both the strategic and operational
levels. Strategic agility involves being able to
2
SPRING 2009
change course or direction in response to events
as they are presented, while operational agility
allows the organization to reallocate its resources
to accommodate the updated direction.
Trillium Health Centre Foundation in Mississauga
is an example of an organization with both forms
of agility. In response to the economic situation,
the Foundation refined its plan for a major fundraising initiative. “Rather than going out with a
major fundraising initiative at this point in time,
we are developing a number of “bridge”priorities
in consultation with the Hospital for presentation
to our prospective donors,” says Steve Hoscheit,
President and CEO. “These bridge projects represent a strategic adaptation and we plan to use
them as opportunities to seed a more major
initiative down the road supporting the longterm priorities of the Health Centre.” In addition,
the Foundation sees the current economy as the
opportunity to redirect energies at the operational level and enhance its focus and resources
around the middle band of donors.
Organizational Agility
EXPLORE
EXIT
EXPLOIT
Aesop’s famous quotation summarizes the concept of organizational integration and the
strength that is derived through it. Being integrated is critical at any time, but its importance
is magnified during times of challenge. The
concept of integration applies at the level of the
Foundation/Department and the institution it
supports, as well as at the operational level of
units within the Department or Foundation itself.
At the Université de Montréal, Don Taddeo, Vice
Rector of Advancement and Alumni Affairs, is
making the current situation an opportunity to
further enhance an already good relationship
with the University’s administration. In response
to questions related to the endowment, he is
involving representatives from the University’s
finance department in meetings with donors
and prospects. “Involving our colleagues from
Finance enables us to respond to technical questions that, without the expertise of this team, we
would not be able to answer.” By doing so, the
University is able to provide superior service and
stewardship to its donors. It also further integrates the work of Development with the rest of
the University and fosters a sense of interconnection and alliance.
At the operational level, it is also important to
create a sense of collaboration and union. In
times of uncertainty, staff may feel threatened
and concerned, which can result in an overly
competitive and unhealthy work environment.
As a result, it is crucial to create a setting wherein employees feel valued and also understand
the connection between their work and the success of the organization as a whole.
ADAPT
As an example, Cathy Daminato, Vice President,
Advancement at Simon Fraser University is making team building a priority. “We are planning to
have a full staff retreat. Not only will this retreat
enable everyone in the room to talk about the
same issues and hear the same messages, it will
give them a chance to be involved in setting the
strategy for the department.” She believes this
exercise will foster a feeling of interconnection and
create an environment characterized by shared
understanding, responsibility and accountability.
Dr. Jerry Gray, Dean Emeritus of the I.H. Asper
School of Business at the University of Manitoba
in Winnipeg and expert in the field of organizational behaviour, is a proponent of this type of
activity. He says that in the same way that regular
communication with external stakeholders is critical, frequent and ongoing communication with
employees is also critical. Internal stakeholders
are generally eager for information and during
times of uncertainty, this inclination is magnified.
And it is when they don’t get it that trouble can
start. “What we often see happening in situations
where people don’t get adequate information is
that they tend to make it up themselves, resulting in rumour and misinformation,” says Dr. Gray.
“This is obviously not a healthy organizational
backdrop upon which to conduct business.”
Organizational Integration
Foundation/
Department
Staff
Institution
Units
Decision making in uncertain times
The only thing that can be said with much
certainty at the moment is that the foreseeable future will continue to be filled with
much uncertainty. At best, uncertainty can
make navigation difficult and, at worst,
can leave organizations and their leadership
lost in the fog.
Dr. Glen Whyte, CCMF Chair in Integrative
Thinking and Professor of Organizational
Behaviour and Human Resource Management at the Rotman School of Management,
agrees that during times of uncertainty, decision making can be a challenging and anxiety
provoking exercise. “When the incentives for
making good choices are high and getting
higher, which is currently the case, our tendency is often to become less rational,”asserts
Dr. Whyte. “And unfortunately, this tendency
can increase the propensity for making poor
decisions.”
As a result, Dr. Whyte provides some advice
regarding how to make high-quality decisions
in environments filled with uncertainty.
Gather Information and Opinions Broadly –
Organizations that are successful in good
times and bad utilize a decision making
process that is systematic and characterized
by an “Obama-esque” approach. The hallmark
of this type of decision making is consultation. It invites and takes into account diverse
perspectives. The degree of diversity depends
on the size of the organization, but the key is
to search widely for information and delve
deeply enough to ensure that you are not
dealing with a false image of reality. The more
levels you have, the further down the hierarchical chain you will need to go.
Root Decisions in Reality – At the best of
times, emotions play a constructive role in
decision making. In times of crisis and uncertainty, however, when information tends to be
vivid, dramatic and overwhelmingly negative,
emotions can become too influential. As a
result, it is critical to make decisions based on
data and reasoned analysis. Gather and focus
on information that is relevant to your particular organization and/or situation and try to
block out the “noise” caused by salient but
extraneous events.
Think it Through – The consultation and data
gathering process should generate a multitude of ideas and solutions, which must then
be thoughtfully evaluated and ultimately
selected or rejected. Good strategic decisions
are rarely made quickly or based on gut
instinct, so take sufficient time to carefully
consider all viable options.
Model Appropriate Decision Making Processes - The decision making behaviour of the
organization’s senior management team tends
to be modeled by others within the organization. As a result, one way to achieve better
decisions throughout the organization is to
ensure transparent and sound decision making practices at the top and at the centre of
the organization.
Diversification and Retooling
Many organizations are making this a time to
look at their operations and make some changes.
The changes they are making fall into two general
categories – diversification of revenue streams
and retooling of programs.
The old adage “don’t put all your eggs in one
basket” sums up the concept of diversification,
which has long been held as a good strategy for
the mitigation of risk. Currently, most organizations are reporting that although major and special event revenues have experienced some softening, their annual and planned giving programs
have held up quite well. Time will tell if this
resiliency is a function of the nature of the programs or simply a question of delayed reaction,
but many organizations are still taking the time
to review and revamp particular revenue lines.
The annual fund is one program on which a number of organizations are looking to focus over the
next little while. Mount Sinai Hospital Foundation
is one such organization.“We are planning to make
a fairly significant investment in our annual fund
over the next several months,”says Susan Horvath,
President of the Mount Sinai Hospital Foundation.
“Although we have been planning changes to
our annual program for some time, we believe
now is the time to be looking for opportunities
to further engage people at this level and provide them with a multitude of ways to support
us. We are looking to ramp up our stewardship,
reinvigorate our giving clubs and develop some
more robust donor reactivation strategies.”
Paul Marcus, President & CEO of York University
Foundation believes that even in these difficult
times, there continue to be opportunities to find
prospects in sectors that are still performing
well. But it takes good research to find them.
“At York University Foundation, we are conducting research that takes into consideration the
opportunities and strengths that continue to
exist, coupled with valuable insights from our
volunteers,” says Marcus. “These efforts, along
with the careful analysis of data that sheds light
on where a potential supporter’s affinity to York
University may lie, helps direct the focus of our
fundraising efforts and energy.”
Many leaders are also looking to retool a
number of their programs. Gary Durbeniuk at the
University of Calgary sees the current economic
situation as an opportunity to improve the fundraising toolkit used at U of C. One strategy they
SPRING 2009
3
are testing is the use of a portfolio approach with
their major donors and prospects, which involves
working with the prospect to create a giving
strategy that will enable both the donor and the
institution to accomplish short and long term goals.
As a result, the approach includes discussions regarding immediate gifts of cash and shares as well
as future gifts of life insurance and estate planning.
A lot of organizations are also looking to retool
and refocus their performance measurement
activities in an effort to monitor what matters
most during these tough economic times.
Although all our interviewees noted that they
planned to set financial targets and work hard to
achieve them, greater focus and emphasis will be
put on activities. Bill Bean, President & CEO of the
QEII Health Sciences Centre Foundation in Halifax,
says that they have streamlined their performance management. “We are focusing primarily
on leading indicators, which are activity focused
measures like number of quality visits, solicitations and proposals as opposed to lagging metrics like dollars in the door,” Bean says. “In times
like this, we feel we are better off measuring processes, because under these conditions, good
processes will lead to good outcomes.”
“Mind-shifting”
Some of these thoughts and concepts may
require “mind-shifting”, which involves changing some of the paradigms under which we
work. We may need to shift our mindsets in
order to survive and thrive in these tough times:
• Change from a mindset of risk management
to one of measured risk
• Shift from annual strategic planning to
ongoing scenario planning
• Involve more staff in the process of decision
making and planning activities rather than
a select few
• Engage and empower employees in the
implementation of decisions
• Address employee concerns candidly in
individual meetings as well as collectively
Marnie A. Spears
President and CEO
Nicole Nakoneshny
Senior Consultant & Editor,
Philanthropic Trends Quarterly
What about the Board?
Although maintaining a high level of engagement with your Board is always critical, it is
even more crucial now. Follow the example
of some of Canada’s leading charities to work
effectively with your Board during this period
of time.
1. Keep them fully informed. Trillium Health
Centre Foundation in Mississauga has engaged
their Board in developing creative solutions
resulting in programs like the I ♥ Hazel
program to honour a health care champion
with a gift to the Hazel McCallion Centre for
Heart Health. I ♥ Hazel has presented an
upbeat marketing and fundraising campaign
that has garnered significant positive media
exposure and support. The Campaign has also
served to increase the frequency of contact
with Directors to engage them and to spin-off
other strategies.
At United Way Toronto, a major area of focus
during this year’s campaign will be the metric of
donor retention. “We are expecting that donors
will be impacted by the economy,” says Susan
McIsaac, Chief Development Officer. “We will
obviously be monitoring the overall amount of
money raised. But we will also be very focused
on retaining donors, regardless of the size of
their gift, in an effort to maintain our relationships with donors and friends for the long term.”
Strategies and scenarios
Times like these require a flexible approach to
planning and call for periodic revisiting of the
organization’s strategic plan. If your organization
is in the middle of a multi-year plan, it may be
time for a revisit to ensure its ongoing validity.
If your plan is coming to an end, the timing is
right to renew organizational strategic directions,
based ideally on a shorter time frame.
KCI has recently been suggesting that organizations start to think about “what if’s” – a scenario
based approach to planning. This type of plan-
2. Have the Board participate in your scenario
planning exercises and help them understand
the consequences of their decisions. For instance, if the Board is suggesting a change to the
revenue generation strategy, run the numbers
to demonstrate the impact that has on the bottom line. United Way Toronto involved its Board
in its contingency planning and even developed
a set of principles that will guide its decision
making as different scenarios present themselves.
3. Use the professional expertise of Board
members to help develop strategy. The QEII
Health Sciences Centre Foundation in Halifax
has begun to create small group discussion
involving Board members as issues of concern
arise. For instance, the Foundation recently
brought together a small group that included
board members to discuss how to respond to a
particular issue of concern for the Foundation.
ning involves the development of several multipronged strategic-action plans based and built
on different scenarios.
Although difficult economic times often prompt
organizations to take a “cut and retreat” strategy,
this approach can have very negative ramifications
in the long term. More prudent is to undertake
planning activities with the philosophy of measured risk. In addition, a “just-in-time” approach
to strategy setting and resource allocation is
advisable. As a result, senior management of the
organization may want to have weekly or even
daily “all hands on deck” meetings to exchange
information and make fast operational decisions.
Next issue:
Watch for our next edition in June
2009, which will take a panCanadian look at corporate giving
trends during tough economic times
Philanthropic Trends Quarterly© is published by KCI.
Unauthorized reproduction or distribution without attribution
is prohibited. Philanthropic Trends Quarterly© is intended to
provide an anecdotal ‘snapshot’ of philanthropy in Canada.
We hope it will serve as a useful overview for observers of the
charitable and nonprofit scene.
Aussi disponible en français. Illustrations by Jim Frazier.
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